An IFA has lost more than £200,000 after a High Court ruled that he cannot recover allegedly unpaid fees from Aviva after one of his clients moved its employees to a new pensions platform, effectively ending his services.
The Court dismissed the adviser's claim against provider Aviva and the company he had advised, saying he could not find any breach of contract and therefore Aviva was right to claw back £204,392 in commission, the FTAdviser reported.
Richard Wales, an independent financial adviser, sought to recover £204,392 in commission for his services when advising property management firm CBRE on its workplace pension. Wales earned commission on premiums that the property management company paid to Aviva.
However, commission was not paid directly to Wales as he was an appointed representative of DBS Financial Management which was subsequently bought by Sesame. Aviva paid the commission directly to these firms which then gave Wales a share of the amounts they received.
As CBRE made the decision to move its employees to a new pensions platform, the company terminated his services following the introduction of auto-enrolment.
Judge Halliwell said: "By 2011, Wales was aware of much of the planned statutory change and understood this was likely to mean the old commission based schemes would be brought to an end and it would become necessary for independent financial advisers to move to fees based models or remuneration schemes based on a percentage of the funds under their management."
He concluded the claims against Aviva and CBRE should be dismissed.